Gurugram-based food technology startup Yumist has decided to shut down its operation after it failed to raise any funding. The startup cooked its own meals and delivered to the customer’s’ doorstep through a cloud kitchen model.
Yumist posted a blog on Friday stating that it was unsuccessful in raising fresh capital to survive in a competitive market. Co-founded by Zomato’s ex-chief marketing officer Alok Jain and Abhimanyu Maheswari, it began its operations in November 2014, keeping in mind their concept of delivering homemade food to its customers.
“From the very beginning, we knew that our biggest challenge will be finding a business model that’s profitably scalable. We tried multiple iterations across our supply chain to achieve this. There was a time in early 2015 when our bikers had hot meals with them basis a demand prediction algorithm and orders were delivered within 15 mins,” the post said.
Yumist was backed by Ronnie Screwvala’s fund Unilazer Ventures and Orios Venture Partners. It raised $2 million in a round led by Unilazer Ventures in December 2015. Orios Venture Partners also participated in the round and invested $1 million in February 2015.
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“We were making Rs 65 in margins per order at an average order value of Rs 190 (an avg order for us would serve 2 people), our delivery outlets were breaking even at just 70 orders a day, we were acquiring new customers at Rs 180 and recovering back this money within 45 days,” they added.
As per the blog post, from March until September, Yumist tripled our revenues and gross margins. With these trends, Yumist would have become a profitable company by June 2018.“..yet, we are shutting shop today. We failed to raise the kind of capital that this business required while staying true to the customer problem. In hindsight, there’s a bunch of internal and external factors that led us to this dead end.”
Besides that, Team Yumist thinks that the cloud kitchen model still shelters huge opportunities for other players and it’s just a matter of time who hits the door harder!
“Cloud Kitchens are here to stay. It’s probably the case that the first one through the door gets shot. The problem we were trying to solve is a big one and we are certain someone will pick up from where we left. Our wishes and support are with them.”
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